 Michael, thank you for joining the show today. It's a pleasure to have you on. How's everything going? Hey, guys. Yeah. Thanks so much for inviting me on. Glad to be here and see your questions. My first question for you today is, is transactions on Phantom can take as little as one second to complete? Like what is behind this magic? Because I think a lot of chains are trying to achieve this today. How is Phantom able to accomplish this? The way it works is basically because the transactions are processed asynchronously on the network. So, you know, essentially Phantom is a technology stack. It consists of like multiple components. So the base component is like the asynchronous distributed ledger that we built over the past few years. And that's integrated with the EVM on top, the Ethereum virtual machine plus like tooling around that, you know, related to, for example, RPC course and Web3 and GraphQL and all these like different like API services that the foundation has provided or other services in the community have provided. So essentially the only difference between say Ethereum and Phantom is the way that transactions are processed. So I like to kind of use a trend analogy in that the way that Bitcoin and Ethereum work are that blocks come, you know, approximately say for Bitcoin every 10 minutes. So when a transaction is lining up or like represented by a person to get on a train, you would have to line up in a queue and then wait for the train to arrive. And then for you to be processed, you would have to be able to go into the train to train, which like you can think of as is kind of like a block with a limited capacity. And so, you know, if you're able to get into the train, then you got to wait to be confirmed by the rest of the network, or you got to wait for the next train to arrive if the train capacity is already full. Whereas like the way that if you're the way that Phantom works because it's asynchronous, it's kind of like a train on demand. So as soon as you arrive at the train station, you a train will arrive and you can enter the train along with the surrounding transactions that entered into the network around the same time that you did. And you get entered into what we call an event block and then that event block gets passed across the network to get your two thirds plus one consensus. So in other words, like, as soon as the transaction enters network, it automatically will start getting confirmed by the network. And so you don't need to wait for a block to be mined at a particular point in time where which might be like 15 seconds or a minute or 10 minutes. The other difference is that finality is deterministic. So you only need one block confirmation after you've got your two thirds plus one consensus from the total validating power of the network. So it doesn't work based on any longest chain rule or any probabilistic finality is all completely deterministic after one block. So there's no need to wait for say five or six blocks after your transaction is mine has been mined in the previous block. So that's how we're able to achieve like the fast finality that we have at the moment, as opposed to more synchronous networks out there. Are there any compromises to like security that you had to make in order to achieve this? I know Bitcoin focuses a lot on like the security. Is it as secure? Would you say or are there any concerns there? Yeah, so there's this thing called the blockchain Trelima, which is essentially a trade off between free aspects or free desirable characteristics you want on your chain. So it's like availability, it's security and decentralization. And usually they say you can only really optimize to and not have so much of like the third option. So kind of like how a founder works is that it's like based on like security and availability and there is a level of decentralization there, but you were still bounded by the number of nodes that are participating in the network. And that's kind of like the drawback at the moment is that we only have around 50 or so nodes that are confirming transactions on that work. So it's not super decentralized. That being said, you could also argue that Bitcoin and Ethereum are not decentralized in the sense that there's a lot of computing power which is concentrated in a few providers rather than across many different networks, but there is still a bit of that trade off going on. What I think the asynchronous processing of transactions allows you to do is kind of optimize that trade off. So you don't have to to give away as much decentralization as you otherwise would, if you were, for example, like running just like a couple of nodes. You don't have to try to achieve speed because the asynchronous processing of transactions allows you to process transactions on demand rather than having to wait for blocks to be mined. The real difficulty of having an AP APT algorithm is how do you get the order of transactions on in the network. How do you get the final ordering of transactions and that's what a lot of the developers have been spending the time on trying to figure out what to do. And we have a solution to it now that works to a reasonable degree that we're looking to improve over time. Michael, I see that DeFi is becoming a big thing on a phantom. As I've seen on DeFi Lama, the TVL reached $5 billion, which is significant. So I want to understand how the stable points the FUSD works. Yeah, so FUSD is a stable coin that we've been working on for a while now and I know that it's something that we've kind of been a bit delayed on but now we're reviewing the way that auctions and liquidations work around it. So FUSD is essentially like a debt-based stable coin on the phantom network, a native debt-based stable coin. So people are able to categorize FTM or better yet the state FTM. So you're able to stake your FTM, earn a yield on that, and also take that FTM and categorize it to generate FUSD, which is supposed to be paid to the US dollar and be able to use that FUSD. So ideally across the phantom DeFi ecosystem for lending and borrowing and earning additional yield and doing more things with it. The auctions and liquidations model that we have right now, it's quite similar to the way, for example, dye works. So if your FUSD is under a certain collateralization ratio, then your collateral gets progressively liquidated over time. The big difference I think between what we have on phantom compared to how dye works on Ethereum is that because the network finality is a lot faster than say on Ethereum, the liquidations and auctions process should happen a lot faster. And so it should be a lot more secure than say on Ethereum where the big issues are that you get delays on the network, you get delays on Oracle updates. And so the prices may not actually accurately reflect on the network, the price might not actually reflect the actual network, the actual prices in the real world. So the auctions and liquidations are currently being like tested in the test net, if you will see so out there just doesn't have the auctions and liquidations but that's essentially how we want it to work. So Michael, how do you, how does phantom intend to overcome limitations of like previous generations platforms like Ethereum, who we've seen kind of struggle here to roll out ETH to. So, what one of the, so there's kind of two aspects to it, I think there's like working on the core consensus and there's working in the middleware. And actually the middleware doesn't get as much attention in terms of scalability, as I kind of think it should. But like talking about the core consensus so as I mentioned before, you know, big advantage that I think phantom has is being able to asynchronously process and order transactions, as opposed to Bitcoin and Ethereum so that's one advantage. The other advantages are that we're working on improvements to the technology so for example data pruning, our version of snap sync. I mean, we're starting to investigate different aspects of sharding and if we can also use IPFS for storage. So we hope that those sort of technologies can improve, you know the core consensus so we have at the moment. The other big scalability improvement has to do with the middleware because the EVM is is not a very efficient virtual machine. And it's also much that I'm executing instructions on the virtual machine is slow they're actually quite fast. It's more so that the way that reads and writes to data that occur on chain by the EVM that that's what's really slow. So, more technically speaking, it's the execution of what's in what are known as S load or S still operations or read and write operations from the data on chain because of the way the, the data is just retrieved the way that the algorithms work that they get progressively slower over time. As the chain gets larger and this sort of limitation applies to any chain that uses the EVM, whether it be phantom, Ethereum or other chains that are out there. And so what we're researching and developing at the moment, like with the University of Sydney is having a new kind of virtual machine that will like dramatically in increase the speed, which you can read and write to data, as well as be able to compress the code to to a factor of, you know, several x so right now they have two virtual machines that kind of experimenting with to see what kind of like by comfort code compression they can get and also make sure that it actually works like a solidity and also they've got a kind of like a temporary solution I would say to improving reads and writes on chain because they've created a new data structure that we're taking a look at and we're looking at implementing on phantom first, as well as the also looking at longer term solutions where reads and writes will scale independently of the growth in the chain. And so the problem is that like for example in like five or 10 years if Ethereum keeps growing, the reads and writes on chain will become progressively slower, and it will just the fees accordingly will continue to go higher. So if we can solve the scalability issue in the middleware as well, the change phantom should speed up, you know, by by orders of magnitude and that's something that I think doesn't really get a lot of attention on the theorem. There's a lot of focus on layer one, it's going to be solutions like we're shouting layer to like with Robs, but there's not so much focus on actually like improving the middleware that much and and knowledge in that it is a big problem when it comes to executing smart contracts in a scalable manner. That'll be interesting to see those improvements I know some of your earlier like documents from earlier in the years that you're going to be more of like an Ethereum helper versus the theorem killer class. But like these upgrading stuff it seems like you might actually be more of a challenger how do you think plays out versus Ethereum smart contract versus phantom smart contracts in the future do you think you could take some of that market share. I definitely hope so. I mean, kind of the future vision is that they won't just be like a single blockchain or single smart contract computer out there. I think they'll be kind of like multiple different layer ones that continue to exist and so for phantom. It's about keeping the pace with the other layer ones, and also exceeding them as well in terms of the technological performance. So, we already we already are kind of like starting to see that because right now, people can use a variety of different like smart contract platforms. And it's very easy to switch between them. So for example, like on metamask all you have to do is just like click on the drop down, put in the chain ID of different chains of like phantom or Ethereum of others, and it's very, very easy to toggle between them. So, in terms of like, you know, us competing as other layer ones like obviously there is a healthy degree of competition there because we all want the best technology, we all want the fastest current platform. However, in another sense, we're not competitors in the sense that I think a lot of users don't just use one type of chain like they don't just use a fear and they don't just use phantom. They kind of use multiple chains and switch between them depending on the opportunities that they that they see on different chains out there. So I think if they as long as like, you know, crypto blockchains continue to grow overall. I think the top performing layer ones in terms of the technology and the growth should continue to do very, very well. And so I don't think in the future that there will just be one single layer one. I think there will be multiple layer ones that people will just toggle between the between them. So, Michael, I've got one last question is more about general not so specific about phantom but what's your take on the regulation and us regulation was saying that anonymity or so don't meet the defies dangerous and they should that should be addressing. Do you think there's, is there a good potential good outcome from that or regulation is always bad. So that's a very good question. So, like, obviously disclaimer like I like I'm no lawyer. But obviously I do, you know, look into this and I've talked to like several lawyers about like what's happening in the US and what's happening elsewhere as well. I think what's happening in the US, having talked to several people about it. And a few of us read on the updates, the updates that occurred, you know, from Congress and from the different regulatory agencies is that the response is kind of being mixed. So on the one hand, they're sort of talked about how like, you know, they like defy how defy is a, you know, positive it's trans it's transformative how like the blockchain technology is real and it's, and the US wants to be a leader in it. At the same time, they talk about, you know, a lot of these projects like unregistered securities and also, of course, like, you know, the other risks to investors, you know, you know, participating in, you know, in these markets that are not as regulated as say the trade fi or traditional finance markets. So I think, I think what's going to happen is that you may have some, you know, crackdowns and some of the more like, like obvious like players that are like vital in the rules but on the whole I don't think it's going to scare people and, you know, drive people out from blockchain or from defy from the US was otherwise people just want to move elsewhere to other jurisdictions that are, you know, more favorable to them. I mean, we're going to see that in the past with different with different technologies different countries like for example with China they said that they don't want mining they don't want to do anything with cryptocurrency. So what have you done what a minus has simply moved jurisdictions to the US to Canada to elsewhere that you know that will allow them to continue mining. So for example like where I am right now in Australia. There's a lot of talk about there being like changes to the corporations act to incorporate like dows and like and and other sort of, you know, positively positive regulatory responses where the government is starting to acknowledge that blockchain technology and, you know, cryptocurrencies are, you know, real technology that, you know, can change people's lives for the better and so kind of want to, you know, like foster that sort of environment. And we've also seen talk about how like the Australian regulators have come out and said to Australian banks that they're not allowed to debank people or close people's bank accounts simply because they're using crypto currencies, because the regulators have said just because they're using cryptocurrency, it can no way imply that you've done anything wrong. And so they've actually ordered the banks not to close people's accounts for using crypto currencies. And that was a bit of an issue here in the past couple of years ago, but not anymore. So we've seen, for example, like in Australia and other countries, the regulators talk very positively about blockchain. So I hope the US kind of follows in that direction otherwise I think they're just going to lose like a lot of talent. Awesome insights there, Michael. And we appreciate you walking through what everything is going on kind of with the Phantom Foundation, and more in particular the DeFi ecosystem. We would love to have you on another episode. And I know you have a giant fan base here watching today. So is there anything that you would like to leave the audience with before we shift over to our next segment? I just like to say to the community, you know, thank you very much for your support. You know, the reason why I found I've got to where it is right now. Because, you know, in the past we didn't have that much community support. Now it's like kind of grown over time and, you know, really we're just developing the technology from the ground up to support the growth of the ecosystem. Because I think when you build the technology out, when you help grow the ecosystem, everything will follow through from it. They're positive and that people like. So it's really the community that have like developed a lot of the applications that are on Phantom, almost all of them actually. And when I was at the Phantom developer conference in Abu Dhabi last month, you know, I got the opportunity to meet a lot of these developers and it was great to see, you know, what they're building and they're all super intelligent. And they're all super motivated and excited to build stuff and they move at light speed. Like it's just insane really. So they're very smart guys. Good deal. Thank you for joining us today, Michael. And it was a pleasure getting to chat with you. Yeah, thanks so much guys. I really appreciate the opportunity.